By Leslie Scism
Consumers used to being nudged by employer-sponsored health-insurance programs to get more physically fit and stay in good health may increasingly see the pitch from another place: life insurers.
In the latest move in this direction, Manulife Financials John Hancock unit is expected to announce Wednesday a program under which some consumers can save 10% or more on insurance premiums and earn rewards with retailers for steps such as annual health screenings, gym workouts and other physical activity, weight loss, flu shots and online health courses.
Policyholders will receive personalized health goals and can log their activities online. They also receive a free Fitbit fitness-tracking device to monitor their physical activity.
The Boston insurers move follows in the U.S. a Well for Life program at Accordia Life, part of Global Atlantic Financial Group. Accordias program, which has been in place for a couple of years, provides discounts on insurance costs for policyholders who stay within a specified weight range and have a physical examination at least every other year, according to the companys website.
John Hancocks version is being run in conjunction with Vitality Group, part of Discovery Ltd., a global financial-services firm that offers wellness programs to employers to include in their benefits programs. Vitality already offers its wellness program with life insurance in other countries, including Australia and the U.K.
Hancock sees the wellness link as a way to excite the advisor community about sales and improve customers experience with life insurance, according to materials it provided about the new venture. The new approach can disrupt and redefine the life-insurance industry, a spokeswoman for the company says.
The offering comes amid sluggish sales industrywide. Last year, total life-insurance sales to individuals were down 2% in terms of both the face amount of insurance sold and the number of policies issued, though annualized premiums edged up 2%, according to insurance-industry-funded research firm Limra.
Industrywide sales of individual life-insurance policies are down 45% since the mid-1980s, according to Limra. About 30% of American households have no life insurance at all, up from 19% about 30 years ago, as The Wall Street Journal reported in a Page One story last year about big life insurer MetLife MET -0.72%s effort to sell policies through kiosks in Wal-Mart stores.
A Hancock spokeswoman says a 45-year-old couple each buying $500,000 universal-life policies could save about $25,000 on their premiums to age 85 and even more if they live longer than that, assuming they reach gold status each year.
In the new program, various health readings and activities earn points that are added up to potentially reach silver, gold or platinum status.
Such wellness programs could end up appealing mostly to healthy people who already are inclined toward physical fitness and see the various steps to obtaining discounts as readily achievable, say some industry experts.
Accordia says its wellness feature isnt intended to attract just healthy and physically fit people. The required weight range is based partly on how much a person weighs when signing up. As an example, it notes a 50-year-old, 5-foot-9-inch woman who weighs 200 pounds would have a range of 129 to 220 pounds.
Before buying into the wellness tie-in, prospective customers should shop around to ensure that the premium rates being offered are competitive, including using comparison-pricing websites such as Term4Sale.com, FindmyInsurance.com andIntelliQuote.com, and direct sellers such as TIAA-CREF (www.tiaa-cref.org) or USAA (www.usaa.com) . Prices can vary widely across the insurance industry.
Hancock is offering the wellness features with both term-life and universal-life policies. Term life is bare-bones coverage that provides a death benefit if the insured person dies during the term the policy is in force. Universal-life policies are designed to be in force for a persons entire lifetime. They combine a tax-advantaged saving compartment with a death benefit.
Consumers should be aware that universal-life policies often are marketed by agents on the basis that interest will build up in the savings compartment to become ample enough to pay some, or all, of the annual insurance charges as the policyholder ages. Over the past three decades, as interest rates have generally declined, many universal-life policyholders have been disappointed by lackluster savings buildup and have had to increase their payments into the policies to keep them in force at the original face-value amount.
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Photo credit: Lynne Sladky/Associated Press via WSJ